Aust. travel giant running ghost offices: VGI

Brisbane-based travel giant, Corporate Travel Management (CTD) has been accused of running “phantom” offices in Europe and America, poor disclosure and aggressive accounting in a scathing new report.

In a 176-page presentation distributed to its wholesale investors, Sydney and New York-based hedge fund VGI Partners identified 20 ‘red flags’, publicly accusing the $3 billion company of dwindling cash flows at odds with claims of strong organic growth and overstating its global office footprint among other things, the Sydney Morning Herald reported.

“Some of the red flags, viewed in isolation, may be of no concern and others may be individually explainable. However, we believe in aggregate they paint a troubling picture,” the hedge fund said.

According to SMH, VGI told investors it visited Corporate Travel’s listed offices in Paris, Amsterdam, Stockholm and Glasgow and found no signs of CTD business.

Offices in the US, from where one third of Corporate Travel’s reported revenues stem, were either ghost offices or minimally staffed. Other offices on the agency’s website appear to not exist or are unused.

“We asked about corporate travel services but the employee said she only handles leisure travel and ‘we don’t even have business cards or any of that stuff,’” VGI said, after visiting CTD’s Washington DC ‘office’.

With an apparent roster of some 2,750 staff worldwide, CTD said it takes the “claims seriously and we look forward to providing a detailed response as quickly as possible”.

While it reviews the VGI report, Corporate Travel issued a statement to the Australian Stock Exchange saying it had placed a trading halt on securities.

“Unless ASX decides otherwise, the securities will remain in trading halt until the earlier of the commencement of normal trading on Wednesday, 31 October 2018 or when the announcement is released to the market,” the statement reads.

Corporate Travel is reputedly the eleventh largest travel booking business and seventh largest corporate travel specialist in the world.

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